Farm Taxes
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IRS Issues Inflation Adjusted Amounts
Many of the tax rates, exemptions, etc. in the Internal Revenue Code have inflation adjustments built into them. Inflation is calculated from October 1 to September 30 of each year to correspond to the national fiscal year. Once that inflation increase is determined, the IRS will issue updated amounts for all items affected by inflation. […]
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What is a Marginal Tax Bracket
I have a done tax returns for over 30 years now and marginal tax brackets have become very intuitive for me and others who prepare tax returns, but I think we sometimes forget that many farmers and other taxpayers really do not understand how marginal tax brackets work. Essentially, as your income moves higher, your […]
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What about Partnerships?
The ACA mandates an $100 per day per employee penalty for providing non-qualified health insurance to more than one employee. Many of our farm operations operate as S corporations and partnerships. There is specific IRS guidance that allows shareholders and partners to deduct these health insurance premiums for owners and since this guidance did not […]
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How Much Does Section 179 Cost the Government?
The Congressional Research Service (a department of the Library of Congress) issues many reports regarding various subjects. They just issued a report on Tax Extenders. The report listed each of the tax extender provisions and the cost to the government over a ten-year period (everything is scored over a ten-year period in Congress). I thought I would […]
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Form 1099-G Does Not Always Require Schedule F Reporting
We got the following question from a reader: “Let’s say I receive a 1099-G for the livestock indemnity program due to older cows that died in the Atlas Blizzard. If I would have sold the cows as culls, I would have put them as long-term on my 4797. Due to the fact that they died and […]
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IRS Provides List of Counties Eligible For Additional Extension on Livestock Replacement
If a rancher is required to sell extra livestock related to drought or other weather events, the tax laws allow the rancher up to four years to replace that livestock with other livestock purchases. However, if the county or any contiguous county continues to be listed as having exceptional, extreme or severe drought during the […]
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Involuntary Conversion of Livestock
Due to much of the western US being on fire, we have received more than a few inquiries about tax treatment of involuntary conversion of livestock. If a farmer sells livestock because of consequences of a drought, the payment of income tax on the taxable gain from the sale may be postponed. There are two […]
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What About Those AFRs?
Periodically I will get a question from a client asking me “How much interest they have to charge on a loan to their child or some other related party?”. The answer can be a little b confusing. You are not required to charge interest on any loan; however, we recommend that you at least charge […]
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September 15 is Worse Than April 15
After being a tax CPA for over 30 years, I always get questions about how tough April 15 must be for us tax preparers. April 15 is tough; however, I believe that September 15 and October 15 are much tougher. September 15 is the deadline for calendar year extensions for all business returns plus trust […]
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Don’t Forget Those Fuel Tax Credits
Most farmers obtain dyed diesel without having to paying federal and in most cases state excise taxes. However, there can be many other uses on the farm that will allow a farmer to claim a fuel tax credit on Form 4136. Some of these uses are: Any field use of gasoline powered tractors/combines, Any field […]